With the new partnership, Farfetch's retail technology will power the Bergdorf Goodman website and app. The deal brings together two luxury fashion leaders.
Farfetch CEO José Neves and NMG CEO Geoffroy van Raemdonck. (Courtesy photo)
Farfetch is making an investment of up to $200 million in Neiman Marcus Group (NMG) as the two prominent luxury fashion retailers forge a partnership, according to an announcement issued Tuesday.
NMG, which is the parent of Neiman Marcus and Bergdorf Goodman, is set to use proceeds from the minority investment to advance technology and digital capabilities. This will include tapping into the capabilities of Farfetch, which operates a marketplace for luxury fashion products.
In the immediate term, the companies will take the following steps together, according to a news release:
The partnership brings together an iconic name that started with in-person retail in NMG with the digitally native Farfetch. It’s a move with international expansion in mind, and shows how integrating physical and digital retail are becoming key parts of plans for growth. Luxury brands were historically cool to collaboration, but the growth of ecommerce ushered in a change in thinking. Farftech has been at the forefront of the move to form alliances in recent years, both via investment and acquisition.
“I believe the US luxury market is at a pivotal point,” Farfetch CEO José Neves said in a statement. “Whilst the US is proving to be a long-lasting source of growth for the luxury industry, fueled by younger generations who are highly engaged with the category, businesses will have to significantly upgrade their digital capabilities – powering both online and offline customer journeys – to meet these new customer expectations and stay ahead in what is going to be a competitive space in the coming years.”
Neves added that the partnership “is about revolutionizing the luxury landscape globally, both online and offline, by combining NMG’s iconic presence in the US and Farfetch’s Luxury New Retail vision and technology.”
The announcement comes days after Bergdorf Goodman made a pair of key promotions that were in part centered around digital offerings. Cheryl Han was appointed to Senior Vice President of BergdorfGoodman.com and Customer Strategy, while Melissa Xides was named Senior Vice President of Bergdorf Goodman Stores and Brand Operations.
The Farfetch partnership the latest tech-centered move for NMG that comes amid the growth of ecommerce in the pandemic. NMG leaders said in 2021 that the company would invest $500 million in capabilities including upgrading delivery and personalization over the next three years, Vogue Business reported at the time.
With Tuesday's announcement, NMG CEO Geoffroy van Raemdonck called Farfetch “the ideal partner to help us grow Bergdorf Goodman to be an even stronger global digital luxury retailer.”
“Farfetch’s investment demonstrates their confidence in our omnichannel strategy, and we look forward to partnering with Farfetch to continue revolutionizing the luxury customer experience and delivering value to all our stakeholders,” van Raemdonck said in a statement.
The investment and partnership is expected to be completed in the third quarter of 2022.
Labor disputes on the West Coast could cause further disruption heading into peak season.
When the first half of 2023 is complete, imports are expected to dip 22% below last year.
That’s according to new data from the Global Port Tracker, which is compiled monthly by the National Retail Federation and Hackett Associates.
The decline has been building over the entire year, as imports dipped in the winter. With the spring, volume started to rebound. In April, the major ports handled 1.78 million Twenty-Foot Equivalent Units. That was an increase of 9.6% from March. Still it was a decline of 21.3% year over year – reflecting the record cargo hauled in over the spike in consumer demand of 2021 and the inventory glut 2022.
In 2023, consumer spending is remaining resilient with in a strong job market, despite the collision of inflation and interest rates. The economy remains different from pre-pandemic days, but shipping volumes are beginning to once again resemble the time before COVID-19.
“Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” said Hackett Associates Founder Ben Hackett, in a statement. “Import container shipments have returned the pre-pandemic levels seen in 2019 and appear likely to stay there for a while.”
Retailers and logistics professionals alike are looking to the second half of the year for a potential upswing. Peak shipping season occurs in the summer, which is in preparation for peak shopping season over the holidays.
Yet disruption could occur on the West Coast if labor issues can’t be settled. This week, ports from Los Angeles to Seattle reported closures and slowdowns as ongoing union disputes boil over, CNBC reported. NRF called on the Biden administration to intervene.
“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” aid NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways. We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”
